Lynn Lake

Recent Project News

Nickel-Copper Project Acquisition Consolidates Major Nickel-Copper Field

New Nickel-Copper Resource at Lynn Lake

  • Transaction completed to acquire the Victory Nickel-Copper Project at Lynn Lake in Canada from Victory Nickel Inc (TSX: NI).
  • Lynn Lake was one of Canada’s most prolific nickel producing districts until its closure in 1976, now boasts:
    • A large resource base,
    • Excellent infrastructure – beneficial for mine development,
    • Huge exploration prospectivity – highlighted by recent discoveries.
  • Combined project creates a significant nickel-copper asset – benefits in scale and mine-life for potential future mining operation.
  • Maiden JORC 2012 Resource Estimate upgrade for the consolidated Lynn Lake Nickel-Copper Project -
    • Total Indicated and Inferred Resources of 9.4Mt @ 0.88% Ni and 0.40% Cu, for 83,000t contained Ni and 37,800t Cu;
    • Resource contains near-surface mineralisation suitable for open-cut mining methods.
  • Mining and processing studies under-way, preparing the project for potential recommencement of mining subject to improved metal prices.
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Lynn Lake Project Summary

With completion of the acquisition of the Victory Project, Corazon has secured rights to the entire Lynn Lake Nickel-Copper-Cobalt mining district under two separate agreements; the “Dunlop Agreement” (ASX announcement 9/08/12) and the “Victory Agreement” (ASX announcement 01/04/15).  These agreements consolidate the Lynn Lake Nickel-Copper Field for the first time since its closure in 1976 and create a significant nickel-copper asset.

Bringing the two nickel projects together will improve the economics of any potential mining operation and provide benefits in scale and possible mine life, enhancing the opportunity to take advantage of an appreciating nickel metal price.

The Lynn Lake project area is well serviced with infrastructure and support, and is situated immediately adjacent to the Lynn Lake township. The major Thompson Nickel Refinery is located only 320km from the Lynn Lake Project and is accessible by sealed road, which may assist in the potential development of the project. A rail line links Lynn Lake with the mining town of Flin Flon, approximately 270km to the south (northern 100km of railway line not currently in use).

The Manitoba Provincial Government is supportive and is actively encouraging mineral exploration and mining. The wider Lynn Lake project area carries no historical environmental liability from previous mining activities.

Existing Resources

The Lynn Lake mining centre operated from 1953 until 1976, producing 22.2Mt @ 1% nickel and 0.5% copper at a rate of approximately one million tons per annum.  Lynn Lake is Canada’s fourth largest nickel mining region, only recently surpassed by the Voisey’s Bay Project.

The historical nickel-copper-cobalt sulphide mining at Lynn Lake occurred in two areas.  The “A Plug” and the “EL Plug”.  These plugs are differentiated mafic intrusive bodies which host the mineralisation.

  • The A Plug is larger and hosts the majority of the mined deposits and past production.
    • The EL Plug is a small satellite intrusion that supported the highest grade mine in the field.

The Victory Project has a Canadian (NI 43-101) Measured, Indicated and Inferred Resource of 17Mt at 0.66% nickel and 0.33% copper for the deposits closest to Corazon’s EL Deposit (Figure 1, Table 1).  Work has commenced on converting the NI 43-101 resource to JORC compliance.

In 2010 an interim resource estimate for the EL Plug was completed on drilling conducted or validated by the Company (JORC 2004 Resource – ASX announcement 13/10/10) totalling 1.8Mt at 0.8% nickel and 0.4% copper.  The 2010 Resource has not been updated and as such no new information regarding the resource is being reported.  Work on defining a new resource estimate including the most recent drilling has commenced.Since 2010, Corazon has been predominantly exploring the EL Plug which was the highest grade mine at Lynn Lake, historically producing 1.9Mt at 2.5% nickel and 1.15% copper.

Table 1: Mineral Resource for the EL, N, O and G deposits at Lynn Lake

Deposit

Lower Cut-off Grade

Tonnes

Grade

Contained Metal

NIEQ %

Ni %

Ni %

Cu %

Ni Tonnes

Cu Tonnes

Indicated Resource Category
EL Upper

0.4

1,120,000

0.77

0.34

8,600

3,800

EL Lower

0.6

676,000

0.83

0.40

5,600

2,700

N

0.8

2,990,000

0.86

0.41

25,700

12,300

O

0.8

2,630,000

0.82

0.37

21,600

9,700

Indicated Sub-Total 

7,420,000

0.83

0.38

61,500

28,500

Inferred Resource Category
EL Upper

0.4

645,000

1.55

0.61

10,000

3,900

EL Lower

0.6

292,000

1.01

0.44

3,000

1,300

N

0.8

710,000

0.79

0.39

5,600

2,800

O

0.8

100,000

0.75

0.36

750

360

G

0.8

240,000

0.94

0.39

2,300

940

Inferred  Sub-Total 

1,990,000

1.09

0.47

21,600

9,300

Total

 

 

9,400,000

0.88

0.40

83,000

37,800

Table 1 Notes: Nickel equivalent grades (NIEQ%) are provided as an indicator of value in a multi-metallic deposit.  Lynn Lake has a long history as a nickel, copper and cobalt mining camp.   It is the Company’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered. Past mining of these deposits on average produced a nickel concentrate, consisting of 14% nickel, 1.5% copper and 0.35% cobalt and a copper concentrate having 30% copper and 0.60% nickel. In this circuit, 85% of the nickel, 93% of the copper and 80% of the cobalt were recovered on average. NIEQ% = (((Cu%*2*22.04622)+(Ni%*7.22*22.04622))/7.22)/22.04622  based on metal prices of Ni = US$7.22 /lb  Cu = US$2.00 /lb.

Lynn Lake Mining Centre Long Section

Figure 1: Lynn Lake Mining Centre long section

In 2011, Corazon discovered a new high-grade sulphide breccia at depth below the EL Mine (refer to Company’s ASX announcements from 2011), a discovery that confirmed the continued prospectivity of the Lynn Lake field, despite the extensive past mine life.

The discovery drill hole (XND001W1 – ASX announcement 28th June 2011) intersected:

  • 23.75m @ 3.34% Ni, 1.54% Cu & 0.079% Co from 731.25 m

With the deepest drill hole to date (CRZ012, ASX announcement 2nd December 2011) intersecting:

  • 44.75m @ 1.55% Ni, 0.65% Cu & 0.044% Co from 773.93m

Including:-

  • 3.85m @ 2.83% Ni, 0.24% Cu & 0.073% Co from 773.93m
  • 11.03m @ 2.31% Ni, 1.01% Cu & 0.062% Co from 784.90m
  • 11.51m @ 2.37% Ni, 0.78% Cu & 0.062% Co from 807.17m

The mineralisation defined by this drilling is not included in the interim resource estimate for the EL Plug (JORC 2004 Resource – ASX announcement 13th October 2010).

Recently Completed Work – JORC 2012 Resource Upgrade

Corazon recently announced (ASX announcement 16/05/15) a JORC 2012 compliant Resource Estimate (“Resource”) for the Lynn Lake Nickel-Copper Project. This estimation combines and upgrades resources previously reported in both JORC 2004 and NI43-101 (Canadian) reporting standards, as well as incorporating some new areas of mineralisation defined by the previous mining operation.

Perth based independent mining consultants Ravensgate defined an Indicated and Inferred Resource of 9.4Mt @ 0.88% nickel and 0.40% copper, for 83,000 tonnes of contained nickel and 37,800 tonnes of contained copper (refer to Table 1 for a break-down of the Resource).

The Resource incorporates the EL, N, O and G nickel-copper sulphide deposits (Figure 1, Table 1) and is the first time a combined resource for the Lynn Lake project area has been defined in-line with Australian reporting standards.

The Resource grade is consistent with the historical grades from the Lynn Lake Mine which operated for 24 years as a large tonnage-low cost mine, before its closure in 1976.

  • For the first time since mining stopped in 1976 reported a resource for the whole Lynn Lake nickel-copper camp and not just on a prospect scale.
  • Identified more tonnes at the EL Plug. In particular, some near surface mineralisation defined by past drilling and mining activities has been upgraded to resource status.
  • Changed the resource category classifications quoted in the Canadian NI43-101 Resource of Measured, Indicated and Inferred for the A Plug (N, O and G deposits) to JORC 2012 Indicated and Inferred Resource classification reflecting a reassessment of the historic nature of the data as resource reporting “modifying factor”.
  • Identified significantly less tonnages than that reported in the NI43-101 “foreign estimate of mineralisation” for the A Plugs N, O and G deposits.  This is due to a much higher lower cut-off grade being used for the current resource statement. However, the Company is confident the larger global mineral inventories previously reported are accurate in their representation of the mineralisation at lower cut-off grades.

Exploration Upside

Within the Lynn Lake Project area there are numerous exploration targets that remain un-tested or not fully tested by previous operators.  The discovery of a high-grade sulphide breccia at depth below the EL Mine is one example.

However, at the EL Deposit there is also significant drill defined mineralisation from surface surrounding the historical mine that has not been included in the resources.  The mineralisation has previously been identified by Corazon as the “Upper-Zone Exploration Target” and may be exploitable by open-pit mining methods (details provided in ASX announcement dated 9th December 2011).  Corazon believes the Upper-Zone mineralisation at the EL Deposit is critical to the recommencement of mining at Lynn Lake and is a priority resource definition target.

Recent discoveries have also been made within the main mining area at Lynn Lake.  In 2008, Western Areas NL (ASX: WSA) discovered the Disco (Maxwell) Deposit with drilling returning 18m @ 1.5% Ni, 0.70% Cu & 0.040% Co from 96m (ASX announcement 23 April 2008); and, in 2010, Prophecy Resources Corp (TSXV: PCY) identified the Tango Deposit with a result of 17m @ 0.6% Ni & 0.30% Cu (ASX announcement 6th December 2010).  These discoveries have not been mined or included in any resources studies.

Additionally, there are numerous mafic/ultramafic intrusives within Corazon’s tenure that have been identified by mapping or geophysics and have yet to be fully tested by modern exploration techniques.

Lynn Lake has an enormous metal endowment localised in a very confined area. The project has excellent prospectivity and it is expected modern geophysical techniques will be of great benefit in exploring the Lynn Lake area.